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Jive Software Announces Fourth Quarter And Full Year 2012 Financial Results

Safe Harbor Statement

"Safe Harbor" statement under Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements, including statements concerning our financial guidance for the first fiscal quarter of 2013 and the full year of 2013, the future growth of the social business market, the shift in customer focus, our position to execute on our growth strategy, and our ability to capitalize on our leadership position in the social business market. The achievement of success in the matters covered by such forward-looking statements involves substantial risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results or events could differ materially from the results expressed or implied by the forward-looking statements we make.

The risk and uncertainties referred to above include, but are not limited to, risks associated with our limited operating history; expectations regarding the widespread adoption of social business platforms by enterprises; uncertainty regarding the market for social business platforms; changes in the competitive dynamics of our market; our ability to increase and predict new subscription; subscription renewal or upsell rates and the impact these rates may have on our future revenues; our reliance on our own controls and third-party service providers to host some of our products; the risk that our security measures could be breached and unauthorized access to customer data could be obtained; potential third party intellectual property infringement claims; and the price volatility of our common stock. 

More information about potential factors that could affect our business and financial results is contained in our prospectus as filed with the Securities and Exchange Commission. Additional information will also be set forth in our quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that we make with the Securities and Exchange Commission. We do not intend and undertake no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

         
JIVE SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
         
   For the Three Months Ended December 31,   For the Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Revenues:        
Product  $ 28,604  $ 19,173  $ 100,040  $ 65,265
Professional services  3,921  3,341  13,626  12,020
Total revenues  32,525  22,514  113,666  77,285
         
Cost of revenues:        
Product  8,495  6,481  30,240  21,689
Professional services  3,570  3,450  14,625  12,596
Total cost of revenues  12,065  9,931  44,865  34,285
Gross profit  20,460  12,583  68,801  43,000
         
Operating expenses:        
Research and development  11,863  7,775  39,190  31,095
Sales and marketing  19,498  13,037  60,235  44,794
General and administrative  4,764  3,675  16,444  12,795
Total operating expenses  36,125  24,487  115,869  88,684
         
Loss from operations  (15,665)  (11,904)  (47,068)  (45,684)
         
Other income (expense), net:        
Interest income  64  4  180  40
Interest expense  (96)  (812)  (421)  (1,735)
Change in fair value of warrant liability  --   --   --   (7,185)
Other, net  (94)  (7)  (98)  (3)
Total other income (expense), net  (126)  (815)  (339)  (8,883)
         
Loss before provision (benefit) for income taxes  (15,791)  (12,719)  (47,407)  (54,567)
Provision (benefit) for income taxes  (218)  (53)  28  (3,763)
Net loss  $ (15,573)  $ (12,666)  $ (47,435)  $ (50,804)
         
Basic and diluted net loss per share  $ (0.24)  $ (0.39)  $ (0.76)  $ (1.95)
         
Shares used in basic and diluted per share calculations  64,165  32,490  62,614  26,071
     
JIVE SOFTWARE, INC.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
     
   December 31,   December 31, 
  2012 2011
     
Assets    
Current Assets:    
Cash and cash equivalents  $ 48,955  $ 180,649
Short-term marketable securities  96,492  -- 
Accounts receivable, net of allowances  54,200  31,999
Prepaid expenses and other current assets  7,864  4,503
Total current assets  207,511  217,151
     
Marketable securities, noncurrent  22,607  -- 
Property and equipment, net of accumulated depreciation  16,803  12,639
Goodwill  23,435  17,265
Intangible assets, net of accumulated amortization  11,710  11,141
Other assets  214  146
Total assets  $ 282,280  $ 258,342
     
Liabilities and Stockholders' Equity    
Current liabilities:    
Accounts payable  $ 9,557  $ 4,566
Accrued payroll and related liabilities  7,357  6,629
Other accrued liabilities  7,123  5,124
Deferred revenue, current  87,698  62,329
Term debt, current  2,400  2,946
Total current liabilities  114,135  81,594
     
Deferred revenue, less current portion  29,349  15,497
Term debt, less current portion  8,400  10,192
Other long-term liabilities  538  340
Total liabilities  152,422  107,623
     
Commitments and contingencies    
     
Stockholders' Equity:    
Common stock  8  7
Less treasury stock at cost  (3,352)  (3,352)
Additional paid-in capital  285,331  258,779
Accumulated deficit  (152,160)  (104,725)
Accumulated other comprehensive income  31  10
Total stockholders' equity  129,858  150,719
Total liabilities and stockholders' equity  $ 282,280  $ 258,342
         
JIVE SOFTWARE, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Cash flows from operating activities:        
Net loss  $ (15,573)  $ (12,666)  $ (47,435)  $ (50,804)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation and amortization  2,880  2,104  10,050  7,211
Stock-based compensation  5,932  2,898  18,209  10,422
Loss from change in fair value of warrant liability  --   --   --   7,185
Change in deferred taxes  (281)  --   (281)  (3,851)
Gain on sale of property and equipment  21  (2) 21  (2)
(Increase) decrease, net of acquisitions, in:        
Accounts receivable, net  (18,325)  (7,219)  (22,201)  (11,655)
Prepaid expenses and other assets  (1,051)  (271)  (3,343)  (844)
Increase (decrease), net of acquisitions, in:        
Accounts payable  1,407  (1,588)  5,529  1,682
Accrued payroll and related liabilities  1,704  1,721  728  2,857
Other accrued liabilities  2,589  (934)  2,645  623
Deferred revenue  19,493  13,522  39,221  27,606
Other long-term liabilities  (405)  --   --   64
Net cash provided by (used in) operating activities  (1,609)  (2,435)  3,143  (9,506)
         
Cash flows from investing activities:        
Payments for purchase of property and equipment  (1,259)  (3,977)  (10,648)  (9,814)
Increase in restricted cash  --   (132)  --   (132)
Purchases of marketable securities  (12,840)  --   (154,475)  -- 
Sales of marketable securities  --   --   11,147  -- 
Maturities of marketable securities  13,140  --   24,229  -- 
Acquisitions, net of cash acquired  (7,613)  --   (7,613)  (22,892)
Net cash used in investing activities  (8,572)  (4,109)  (137,360)  (32,838)
         
Cash flows from financing activities:        
Proceeds from exercise of stock options, including tax withholding  2,246  1,409  5,970  3,416
Proceeds from issuance of preferred stock, net  --   --   --   40,000
Proceeds from initial public offering, net  --   133,050  (1,014)  132,486
Proceeds from revolving credit facility, net  --   (4,048)  --   (3,533)
Proceeds from term loans  --   --   --   24,203
Repayments of term loans  (600)  (15,823)  (2,450)  (16,927)
Net cash provided by financing activities  1,646  114,588  2,506  179,645
         
Net increase (decrease) in cash and cash equivalents  (8,535)  108,044  (131,711)  137,301
Effect of exchange rate changes  18  --   17  -- 
Cash and cash equivalents, beginning of period  57,472  72,605  180,649  43,348
Cash and cash equivalents, end of period  $ 48,955  $ 180,649  $ 48,955  $ 180,649
         
JIVE SOFTWARE, INC.
RECONCILIATION OF NON-GAAP INFORMATION
(In thousands, except per share data)
(Unaudited)
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Gross profit, as reported  $ 20,460  $ 12,583  $ 68,801  $ 43,000
Add back:        
Stock-based compensation  622  234  2,035  544
Amortization related to acquisitions  662  664  2,521  1,738
Gross profit, non-GAAP  $ 21,744  $ 13,481  $ 73,357  $ 45,282
Gross margin, non-GAAP 67% 60% 65% 59%
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Research and development, as reported  $ 11,863  $ 7,775  $ 39,190  $ 31,095
less:        
Stock-based compensation  2,065  880  6,250  2,644
Amortization related to acquisitions  17  --   17  1,031
Non-recurring acquisition expense  100  --   100  333
Research and development, non-GAAP  $ 9,681  $ 6,895  $ 32,823  $ 27,087
As percentage of total revenues, non-GAAP 30% 31% 29% 35%
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Sales and marketing, as reported  $ 19,498  $ 13,037  $ 60,235  $ 44,794
less:        
Stock-based compensation  2,080  683  4,970  3,918
Amortization related to acquisitions  11  --   11  -- 
Sales and marketing, non-GAAP  $ 17,407  $ 12,354  $ 55,254  $ 40,876
As percentage of total revenues, non-GAAP 54% 55% 49% 53%
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
General and administrative, as reported  $ 4,764  $ 3,675  $ 16,444  $ 12,795
less:        
Stock-based compensation  1,165  1,101  4,954  3,316
General and administrative, non-GAAP  $ 3,599  $ 2,574  $ 11,490  $ 9,479
As percentage of total revenues, non-GAAP 11% 11% 10% 12%
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Loss from operations, as reported  $ (15,665)  $ (11,904)  $ (47,068)  $ (45,684)
Add back:        
Stock-based compensation  5,932  2,898  18,209  10,422
Amortization related to acquisitions  690  664  2,549  2,769
Non-recurring acquisition expense  100  --   100  333
Loss from operations, non-GAAP  $ (8,943)  $ (8,342)  $ (26,210)  $ (32,160)
         
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Loss before provision for (benefit from) income taxes, as reported  $ (15,791)  $ (12,719)  $ (47,407)  $ (54,567)
Add back:        
Stock-based compensation  5,932  2,898  18,209  10,422
Amortization related to acquisitions  690  664  2,549  2,769
Non-recurring acquisition expense  100  --   100  333
Change in fair value of warrant liability  --   --   --   7,185
Loss before provision for (benefit from) income taxes, non-GAAP  $ (9,069)  $ (9,157)  $ (26,549)  $ (33,858)
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Net loss, as reported  $ (15,573)  $ (12,666)  $ (47,435)  $ (50,804)
Add back:        
Stock-based compensation  5,932  2,898  18,209  10,422
Amortization related to acquisitions  690  664  2,549  2,769
Non-recurring acquisition expense  100  --   100  333
Change in fair value of warrant liability  --   --   --   7,185
Tax benefit related to acquisitions  (281)  --   (281)  (3,851)
Net loss, non-GAAP  $ (9,132)  $ (9,104)  $ (26,858)  $ (33,946)
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Basic and diluted net loss per share, as reported  $ (0.24)  $ (0.39)  $ (0.76)  $ (1.95)
Add back:        
Stock-based compensation  0.09  0.09  0.29  0.40
Amortization related to acquisitions  0.01  0.02  0.04  0.11
Non-recurring acquisition expense  0.00  --   0.00  0.01
Change in fair value of warrant liability  --   --   --   0.28
Tax benefit related to acquisitions  (0.00)  --   (0.00)  (0.15)
Basic and diluted net loss per share, non-GAAP  $ (0.14)  $ (0.28)  $ (0.43)  $ (1.30)
         
   Three Months Ended December 31,   Twelve Months Ended December 31, 
  2012 2011 2012 2011
         
Total revenues  $ 32,525  $ 22,514  $ 113,666  $ 77,285
Deferred revenue, end of period  117,047  77,826  117,047  77,826
Less: Deferred revenue, beginning of period  (97,554)  (64,304)  (77,826)  (50,195)
Billings  $ 52,018  $ 36,036  $ 152,887  $ 104,916
CONTACT: Investor Contact:
         Brian Denyeau
         ICR
         (646) 277-1251
         brian.denyeau@icrinc.com
         
         Media Contact:
         Amanda Pires
         (650) 465-1215
         amanda.pires@jivesoftware.com

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